Indian Rupee Falls to Record Low as Global Trade War Intensifies

New Delhi (Sputnik) — The Indian National Rupee (INR) fell to a record intra-day low on Thursday of 69.10 rupees per US dollar, breaching the previous low of 68.82 on August 28, 2013. The fall in the value of the INR has dampened expectations of higher economic growth as well as employment generation for millions of youths.

READ MORE: Asia Faces Cascading Crises as Dollar Strengthens

JP Morgan economist Sajjid Chinoy believes that the fall in the rupee is a consequence of the trade disputes between the US and China.

"Six of the worst performing currencies against the dollar in the last 10 days are Asian. So, this is very much reflecting the regional fallout from a tariff war between China and the US. That is the backdrop here," Chinoy said.

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Taking a cue from the increasing trend in the growth of national income, Indian Finance Minister Piyush Goyal expressed optimism on June 18 that 10 percent GDP growth by end of the current financial year is possible based on the revival of domestic demand and the dynamism of a society that has become "aspirational." India has been the world's fastest-growing major economy for the past six months, achieving 7.7 percent growth in the gross domestic product in the first quarter of 2018.

READ MORE: Bhutan Asks Its Citizens to Deal Less in Indian Currency

But, the upward trend in oil prices has been threatening to hurt businesses as it may push input cost of the product in the future. The situation may worsen further for India, as the US has warned Asian buyers to stop importing crude oil from Iran after November of this year. Subsequently, on Thursday, the Indian petroleum ministry, as per industry sources, cautioned its public and private refiners to be prepared for a drastic cut in crude imports from Iran. India imports around 11 percent of its oil from Iran, which is cheaper than other countries due to heavy crude and low transportation costs.